If inflation is bad news, then deflation is good news, right? Well, not necessarily
December 16th, 2008 at 12:50pm Pat Cunningham
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When I awakened this morning to news that consumer prices declined last month at a record rate, I had mixed feelings.
Lower prices sound good to me, I thought, but I also suspected that something was wrong. The idea that good economic news would pop up out of the blue just didn’t seem to fit with the current national mood.
Then I read THIS PIECE, which includes this passage:
“Falling prices for goods and services might sound like a good thing for consumers, but a continued downward spiral can wreak economic havoc. During deflationary periods, companies earning less react by slowing production and cutting jobs, which causes consumers to scale back spending even more. The pattern is hard to stop because it feeds on itself.”
OK! So now I’m going to insist on paying extra for everything I buy just so I can help prevent the economy from slipping farther down the tubes.
POSTSCRIPT: I knew Jerry Ford’s WIN buttons would work sooner or later. Remember THEM?
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4 Comments Add your own
1. Juice | December 16th, 2008 at 7:15 pm
Well I think how optomistic someone is about the economy is directly related to how much they watch the very opinionated new channels or read the same. I personally quit watching the mostly liberal ones, especially MSNBC, when Chris Matthews started getting quivers up his leg. They and the rest of the “sky is falling” journalists are always proved wrong. The only unknown about a recession is when, not if, the economy recovers- usually 6-12 months after the market starts growing back. I put every extra dollar I can find right now into buying stock which will no doubt be hugely more valuable in the coming years. Biggest no-brainer and a once in a lifetime opportunity. Thanks, liberals for your panic attacks and your continuation of telling people what victims they are and how pathetic the world is. You should be teaching them how to invest in their future and not be envious of people who do.
2. swamprat | December 16th, 2008 at 9:44 pm
Like they say Juice, talk is cheap. Tell me where the growth is. Which stocks are you shoveling money into? I know, it’s a secret right? You can’t have the wealth destruction the U.S. is experiencing and expect the market to rebound any time soon.
The damage GWB has put on this economy will take years to undo.
But it is funny that you knock Obama on this blog but put your faith in the market’s rebound. If you are putting every extra dollar into the market you must believe in him.
Actually this post is about deflation which will lead to a depression. So I hope you are a young person, so you have time to recover all those “extra” dollars your are throwing at the market.
And by the way don’t scream when the trap door opens on your savings. GWB and his cronies have caused the damage. Soon the market will realize that. Good luck! You will need it.
3. Juice | December 18th, 2008 at 6:38 pm
Congress makes all the laws. Presidents really don’t do much except get the process started. I didn’t say a word about Obama and think GWB is gutless and a financial liberal. Back to investing your Tax Rebate check: Certain really strong companies are dragged down by the market because they are bought/sold within mutual funds (go along for the ride) . But they recover much quicker because they plan ahead (see link). I will send you this link, because you need it, and try to help you though your media-indused panic which you have swallowed whole. We can both save this email and maybe Pat can start a blog based on this email one year from now. See page 18 in the link or better yet read the whole report. Thank me next year. Happy New Year.
http://www.woodward.com/pdf/corp/ir/ar2008.pdf
4. Juice | December 18th, 2008 at 7:01 pm
Otherwise more Hope will probably be redistributed your way in early 2009 and you can run to Wal-Mart and spend it to China OR you can find a brighter day in the next years and beyond
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